Press Release

Success for ABI campaign on personal pension selling advice

The Financial Services Authority (FSA) today issued a consultation paper on abolishing the so-called ‘RU64 rule’ which forces financial advisers, when recommending personal pensions, to explain in writing why that type of pension was at least as suitable as a stakeholder pension. RU64 had the effect of restricting consumer choice and access to pensions because it forced the industry to standardise products and advisers to focus on single premium and group business, at the expense of individual savers with relatively small sums to invest.

 

Francis McGee, ABI Head of Regulation and Strategy, said: “We've been calling for this change for some time, and it's really good to see the FSA making progress.  A key part of the ABI's agenda for action on savings is to build a pensions industry fit for purpose - and that needs modern regulation that is also fit for purpose.  

 

“The FSA has done some thoughtful work on why advice about retirement saving has been harder to come by in a price capped, heavily regulated world. This rule has done a job in the past. But now it is part of the problem, and it should go."

 

The ABI will respond formally to the consultation paper in due course, strongly urging the FSA to abolish RU64. We will point out that while the rule may have served a legitimate purpose at the time when the stakeholder pension was launched, it has now become a serious barrier to saving. We hope that all groups involved in the pensions industry will take a pragmatic view and acknowledge that the need to stimulate and promote saving for retirement is of primary importance, and that sensible regulation is key to achieving this goal.